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FFP EXPLAINED

What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.

What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.

What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.

Any punishment for alleged financial violations at French football giant Paris Saint-Germain is likely to stop short of exclusion from the lucrative Uefa Champions League in a major relief for its Qatari financial backers, analysts said on Thursday.

European football authorities are investigating whether PSG artificially inflated sponsorship deals from Qatari businesses to stay within rules aimed at preventing cash-rich clubs from having an unfair advantage in the continent’s top leagues.

A ban from the Champions League would be a major setback for Qatar which sees winning Europe’s most prestigious football trophy as the ultimate aim of its soft power promotion through sport, said experts.

The club was placed under investigation in September following the record-breaking €222 million (Dh1 billlion) deal to sign Brazilian star Neymar and the loan signing of French striker Kylian Mbappe from Monaco which cast doubt on the club’s ability to stay within the rules. Mbappe's loan move is set to be made permanent this summer for a reported €145m.

A preliminary Uefa probe looked at sponsorship deals including Qatar National Bank, BeIN Sports and the Qatar Tourism Authority, according to the Financial Times. It found that some had been “overstated”, the newspaper said, and were potentially in breach of financial fair play rules.

Under the system introduced by Uefa in 2011, clubs are supposed to break even or post relatively small losses over a three-year period. Uefa has the power to investigate sponsorship deals to ensure that they are not raised to artificially high levels to cover the losses from major transfer deals.

If they are found to have breached the rules, Uefa can impose transfer embargoes, dock points or ban the team from European competitions.

However, Uefa face the challenge of trying to establish the going rate for sponsorships and naming rights, said Dr Rob Wilson, an expert in football finance at Sheffield Hallam University.

“I think Uefa is posturing a little bit. It has responsibility to build this up as far as possible but it’s very difficult to prove these violations.”

Uefa declined to comment beyond its announcement in September that it was opening the inquiry into Paris Saint-Germain. Uefa said its finance body charged with investigating the case would meet on April 20 but may not conclude the case on that date.

“The real test is whether Uefa are prepared to ban PSG from the Champions League,” said Chris Brady, the director of the centre for sports business at Salford university. “Anything else will be water off a duck’s back.”

Being banned from European competitions would be a disaster and could check Arab investment in European leagues, said Dr Danyel Reiche, Associate Professor for Comparative Politics at the American University of Beirut.

“Without Qatari’s sport investments, hardly anybody in the world would care or even know about the tiny country,” he said.

“Winning the Champions League is the ultimate goal to achieve Qatar’s soft power and national security objectives.”

He said, however, that a Champions League ban would damage both PSG and Uefa as it would mean the loss of stars such as Neymar for its premier event. “Uefa’s decision will certainly have implications on future Arab sponsorship deals in European soccer,” he said.

Updated: April 12, 2018 08:30 PM

FFP EXPLAINED

What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.

What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.

What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.